According to Trulia’s Budget Index, Los Angeles is the worst city for attempting to save. That is, considering percent of income spent on Los Angeles housing, home prices, rent, access to financial services and discount stores per 10,000 households.
So, as an agent: Is Los Angeles the best place to sell real estate?
Although it may appear so on TV, not all of LA is comprised of multi-million dollar estates. While it may be rare – or downright impossible – to find a comfortable abode below three figures in the Los Angeles metro, some neighborhoods remain accessible. But, you have to act fast with buyers in this price range and agents need to be highly competitive.
High prices tip the median scale
January is another strong month for Los Angeles real estate, with both rent and for-sale prices making it one of the most expensive locales in the nation. In fact, buyers searching for sale in Bel Air face a median purchase price of $3,290,000 as of January 1. At a median size of 3,641 square feet, potential buyers face paying $840 per-square-foot for median-priced estates.
In early 2015, homes in Bel Air listed at a median $2,649,000 for 3,581 square feet, or around $770 per-square-foot. Bel Air real estate reveals steady long-term value increases for owners and sellers, a trend which applies to many of the other affluent neighborhoods of LA.
For renters, the highest priced median rent at the beginning of 2016 was in Pacific Palisades for $6,995 a month. Pacific Palisades offers a median size of 1,770 square feet, which provides plenty of space for two bedrooms, perhaps even a home office and formal dining space.
All of the most expensive rentals in Los Angeles over the past few years were located in Bel Air, followed by rentals in Pacific Palisades, Hollywood Hills and Beverly Glen.
Where to find affordable housing in LA
Montecito Heights, Monterey Hills and Pacoima are viable options for buyers searching on more modest budgets.
Although these areas are less expensive neighborhoods than the famed, glamorous LA ‘burbs, they are still subject to increasing for-sale prices. In Montecito Heights for instance, the median price as of the first of the year was $441,150 for 1,290 square feet.
A few weeks later, the median price is $442,800 for the same size home. Although the price per-square-foot – $355 – hasn’t shifted drastically yet, this upward trend could continue throughout 2016, bringing more apparent price changes for future mid-range buyers.
Leasing is moderately expensive for apartments in Echo Park, a diverse community next to Chinatown, but rents are on the rise. In early 2015, the median price point for Echo Park was $1,999 per month for 900-square foot rentals. As of January 1, the same size units were listed at a median of $2,295 per month.
Upward shifts in rent prices are currently a national issue for lessees – less for landlords and income property owners – so those currently under a lease might consider entering homeownership while mortgage rates are still somewhat low.
Jennifer Riner is a real estate, finance, design and home improvement writer for Zillow Group and partners. Connect with her on LinkedIn or follow her on Twitter for more.